Profit falls 11% to £2.15m as builders merchant absorbs costs of acquiring local rival Timber Force in 'testing' market
Builders merchant Gibbs and Dandy suffered an 11% drop in pre-tax profits in the first half of the year after acquiring a rival in the south Midlands.
Profit before tax dropped to £2.15m for the first six months to June 2006 compared to £2.41m in 2005. Operating profit fell to £2.16m in 2006 from £2.37m in 2005 and net margins fell to 7.4% in 2006 from 8.5% in the first half of 2005.
Chairman John Castle said the cost of acquiring and integrating Kettering-based Timber Force UK had increased overheads causing a drop in profits. The Luton-based firm bought Timber Force for £1.475m in July 2005.
Sales remained flat at the builders merchant. Sales increased 4.7% to £29.18m in 2006 compared with £27.86m the previous year. However like-for-like sales excluding Timber Force are on a par with last year.
Castle said: “I predicted in my last statement to you that 2006 was likely to be another testing year for Gibbs and Dandy and its management and so it has proved. However, given the trading conditions that have prevailed I am not displeased with the results.”